how to lower property taxes

Why is there often a huge difference between what the Assessor says your property is worth and what an appraiser says maybe during a purchase or refinance? Let’s take a look below a some of the main distinctions and then consider a real life example of a property owner who has overpaid about $8,000 in property taxes in recent years because his assessment was simply too high. Ouch.

Assessor vs. Appraiser: An Assessor in California is required to have a certified appraiser’s license, but that doesn’t mean the value will be same as an appraiser coming out to your house during a refinance, purchase or other situation. Ultimately there is a huge value difference at times because the Assessor is establishing value for taxation purposes (and is bound by the protocols of tax code) and an independent fee appraiser is likely measuring the current market and is not doing anything related to taxation.

Overpaid $8,000 in Property Taxes: This case above is a striking example of one of the unfortunate byproducts of a mass appraisal process by the Assessor. This property owner’s assessment on his fourplex in Sacramento was accurate for a couple of years after purchasing around $300,000 in 2003, but as values tanked in the neighborhood, the assessed value simply remained too high above all other competitive sales. The sad result for the property owner has been about $8,000 in overpayment through the years. Unfortunately the owner cannot go back to dispute the previous years of assessment, but at least this year he is going to appeal his property taxes to hopefully bring the assessed value down from $325,000 to around $200,000 where it should be.

It’s now property tax appeal season, so I wanted to quickly answer some of the most common questions I’m asked by property owners. Skim below to get a sense of what to expect during the tax appeal process. I hope this is helpful.

When is the first date to appeal property taxes in Sacramento County?
July 2, 2012 is the first date to dispute your property taxes in Sacramento County for a “decline in value” situation. A “decline in value” is when the market has declined, but the Assessor has not kept up with current trends. In short, this means you’re paying too much in property taxes.

How much time do you have to dispute your property taxes?
You can dispute your property’s assessed value from July 2 to November 30, 2012 in Sacramento County for typical “decline in value” situations. Most counties surrounding Sacramento keep the same time-table, but keep in mind Placer County has a deadline of September 15. Remember that supplemental assessments and escape assessments are often date-restricted (60 days from the Assessor’s letter).

How much money can be saved?Every $10,000 of assessed value equals about $100-125 out of your wallet. If you are overassessed by $50,000, for example, then that’s $500-625 of overpayment for the year. This might sound outrageous, but you’d be surprised how common it is for property owners to be overassessed. Over the past several years I’ve found most clients have been scheduled to overpay anywhere from $400-$1,000. The largest reduction a client received was over $10,000 for the year.

How do you know if you should appeal or not?
The first thing you should do is look up your assessed value on the Assessor’s website (Sacramento County). The assessed value is supposed to be based on January 1, 2012 (NOT today’s value). Does the value seem reasonable to you? My tax appeal company can look up your property for free too to see if there might be a savings for you. Click HERE to fill out a brief property profile.

Which application should you fill out?
I strongly recommend filling out the “Application for Changed Assessment”. There are actually two forms available to property owners, so it can be a bit confusing at times. However, only one of the forms is an actual appeal. Watch the video below (or here) for clarification on the “Decline in Value” (Prop 8) form vs. the “Application for Changed Assessment.”

What do you to give the Appeals Board besides the application?
It’s extremely important to support your value. This is really the meat of your appeal. Choosing a random value without support or lowballing your assessed value is not a good idea. You should support your opinion of value with comparable sales around the date of assessment (January 1, 2012) and any other market data to supplement the sales. If you can do that, great. If you need help doing that, I’m here for you. My appeals are very well-supported and include the best comparable sales, the least comparable sales (when applicable), multiple graphs of market trends, a description of the neighborhood market and a reconciliation of value to help explain why your property is worth what it is worth.

Do you need a full appraisal when disputing your property taxes?
No. Unless your property is custom or extremely different, I don’t recommend a full appraisal in most cases. I’ve developed a mini-product that is far more affordable, yet still gives a very detailed analysis of the market. This product has worked very well and is about 1/3 of the cost of a full appraisal.

What happens after you turn in your appeal?
The Sacramento County Assessment Appeals Board technically has up to two years to get back to property owners when they file a property tax appeal. I’ve personally not seen them take that long for my clients, though it is technically possible. I’ve been finding many of the 2011 appeals I did for home owners in the Fall of 2011 have already been resolved or are in process right now (there are some I’m still waiting on of course). Read more HERE.

This post could go on and on. If you have other questions, please see my property tax appeal website as well as my property tax appeal article library. I am glad to talk via email or the phone too to help explain the process. I’ll always be honest with you and explain all of your options. There are too many tax appeal companies that frankly rip people off by providing a low-quality product, and on top of that they take 40-50% of your refund if the appeal is successful. That’s not how I run things as I have a nominal flat fee and my reports are very solid.

Disclaimer

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The information on this website is meant entirely for educational purposes and is not intended in any way to support an opinion of value for your appraisal needs or any sort of value conclusion for a loan, litigation, tax appeal or any other potential real estate or non-real estate purpose. The material found on this website is meant for casual reading only and is not intended for use in a court of law or any other legal use. Ryan will not appear in court in any capacity based on any information posted here. For more detailed market analysis to be used for an appraisal report or any appraisal-related purpose or valuation consulting, please contact Ryan at 916-595-3735 for more information.

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